Thursday, Aug 11, 2022
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Crude Response: How Modi Govt Defied Western Powers To Safeguard India's Economic Interest

India -- the world's third-biggest oil importer - has taken advantage of deeply discounted prices to ramp up oil imports from Russia at a time when global energy prices have been rising

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Photo by AP/PTI

Standing up to the bullying of the US and other European countries, India has increased import of Russian crude oil to 18 per cent of its overall portfolio in May this year. This had made Russia the second largest crude oil supplier to India, above Saudi Arabia.

According to a report by Reuters, “In May Indian refiners received about 819,000 barrels per day Russian oil, the highest thus far in any month, compared to about 277,00 in April.”

This comes despite the US and other western countries' repeated pressure on India to not consider buying oil from Russia after Moscow invaded Ukraine in February this year.

External Affairs Minister S Jaishankar last week slammed Europe for its constant criticism of India for purchasing Russian oil even as he questioned the US’ decision to not lift the sanctions on Iranian and Venezuelan oil.

“Today, Europe is buying [Russian] oil, Europe is buying [Russian] gas…. The new package of sanctions (European sanctions on Russia) is designed in a way where consideration has been given to the welfare of its population…. People need to understand that if you can be considerate to yourself, surely you can be considerate to others,” Jaishankar said.

“Is buying Russian gas not funding the war?” he said, adding, “It’s only Indian money and oil coming to India that funds it, but not the gas coming to Europe? Let’s be a little even handed out here.”

Not just Jaishankar, Finance Minister Nirmala Sitharaman has also often reiterated that India will continue buying cheap Russian oil in the nation’s interest.

“I would put my energy security first. If the fuel is available at a discount, why shouldn’t I buy it?” Sitharaman said last month.

India -- the world's third-biggest oil importer - has taken advantage of deeply discounted prices to ramp up oil imports from Russia at a time when global energy prices have been rising.

Russia has usually not been a major supplier to India -- in January and February this year, India did not import any crude from Russia but imports began to rise from March.

Discounted Russian oil has provided some relief to India -- which imports more than 85% of its oil -- just as inflation worries compelled the government to look for measures as food and fuel prices surged.

To control spiralling inflation, Sitharaman recently announced a host of measures to provide respite to India’s poor. In May, the government cut central excise on petrol and diesel by Rs 8 per litre and Rs 6 per litre, respectively. With this, petrol became cheaper by Rs 9.5, whereas diesel by Rs 7.

Russia is facing sanctions from western counties for its invasion of Ukraine prompted many oil importers to cut trade with Moscow, pushing spot prices for Russian crude to record discounts against other grades.

That gave an opportunity to Indian refiners, which rarely used to buy Russian oil due to high freight costs, to buy low-priced crude. 

India has emerged among the top 10 importers of Russian fossil fuels, with China, Germany, and Italy topping the chart, a report by Finland-based independent organisation Centre for Research on Energy and Clean Air (CREA) shows.

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